Gatehouse Bank realises £34.4m student property deal
Student accommodation provides a 37.2% return on investment for Gatehouse investors
London, UK: Gatehouse Bank plc (Gatehouse), a London-based wholesale Shariah compliant investment bank, today announces the successful delivery of its realised investment in UK real estate, through the sale of a two properties as part of a UK student accommodation portfolio in a deal worth £34.4 million. The deal represents an excellent return for Gatehouse’s investors, who have benefited from an internal rate of return of 18.6% during the two year holding period, and a return on investment of 37.2% on exit.
Mr Fahed Boodai, Chairman of the Board of Directors at Gatehouse Bank announced today via an exclusive video link from London,“Over the past two years we have invested in the student accommodation sector on behalf of our investors, confident of the excellent return potential, which we believe we have successfully delivered in the realisation of the UK student accommodation portfolio investment.”
Boodai added, “Gatehouse Bank was quick to seize the market opportunity to enable an impressive return on investment. We promised that we would deliver a solid return to our investors, and we have achieved that result yielding a 9.1% return in the first year, and an increase to 9.7% in the second year. When the time was right, we managed to deliver a successful exit result within two years, one year ahead of schedule as we have achieved our targeted returns. Importantly, we delivered the asset sale with a view to reward our investors with a profitable return on investment as a priority, rather than retain asset management fees for the additional holding period.
Gatehouse, has clearly demonstrated to its investor clients its ability to develop a commendable track record of transactional experience. This is due to our unrivalled expertise in the market, which includes a strong UK and US Real Estate team of originators, analysts, asset managers and a credit and market risk team who provide end-to-end commercial real estate solutions to investors. We have the capability to source and originate successful acquisitions, and also return profits upon exit, to manage the full life cycle of real estate investment for investor advantage.
As an FSA regulated bank, we are also uniquely positioned with a competitive advantage, given our ability to add a depth of product offering in liquidity and wealth management options for our investors, which adds further financial comfort and meets their objectives for wealth preservation.”
Boodai concluded, “Combined with its recent successful exit of the VA Oceanside Clinic property in the US for $54.5m, the student accommodation realised investment showcases the calibre and track record of Gatehouse’s cross continental transactional experience in the US and UK real estate market.”
Stuart Jarvis, Vice President, Real Estate, Head of Student Accommodation commented on the transactional highlights of the transaction stating:
“Despite the economic downturn, average rental growth rates in the student accommodation sector have remained extremely resilient, certainly when you compare the rates to traditional real estate investments in the past year. We are seeing strong returns not just in London, but also in the regions, mainly due to the lack of supply of purpose-built student accommodation coupled with the rising demand of overseas students looking to study in the UK.
“Gatehouse has earned an excellent track record in student accommodation; it’s an attractive investment sector that delivers good yields for our investors. We continue to actively look for investment opportunities to complement our current investment portfolio of student accommodation in Glasgow and Oxford.”
Gatehouse continues to provide an attractive portfolio of property investments for investor clients with more than $500m in total real estate acquisitions. Gatehouse specialises in originating, structuring and funding investments in a Shariah compliant manner. To meet continuing investor demand for high quality property investments, Gatehouse provides leading advice and opportunities to investors across a diverse range of properties ranging from office, student and logistics sectors.